Sanctions boost business for Iranian company

Half of the 25 Very Large Crude Carriers owned by the National Iranian Tanker Company (NITC) are now storing oil instead of exporting it, an Iranian shipping official said Tuesday. Last month, six of the 25 ships sat idle, shipping data show. NITC also plans a $1.2 billion expansion to its fleet as foreign tanker companies beckon off Iranian shipments in the wake of sanctions. NITC's success is the latest example of how Iranian companies are able to benefit from sanctions. After foreign companies pulled out from Iran's oil and gas projects, they were, in many cases, replaced by Khatam-al-Anbiya Company. NITC has not been specifically sanctioned, although a US congressman has recently drafted a bill to extend sanctions to the company, which is private. According to data from major brokerage ICAP the number of NITC supertankers storing oil at sea stood at six on March 23, half of them being long-term storage. It remains to be seen, however, if the oil currently stored will remain idle for an extended period or if it is only temporarily immobilized. Yet, the US-driven EU sanctions on Iranian oil supplies are boosting demand for Iran's own tankers. With many foreign shippers halting Iranian oil sailings due to banking and insurance sanctions, state-owned NIOC is increasingly relying on NITC. "There are some difficulties for transportation" of Iranian oil, another Iranian official said. As a result, "there is more demand for NITC tankers" from NIOC, notably in Asia. Indeed, NITC, one of the world's largest tankers operators, is set to boost its fleet with 12 new very large tankers, worth $1.2 billion in total, by the end of next year. As a result of this expansion, NITC's tankers could cover about 40% of the country's crude exports compared to 30% today, the official added.